The Court of Appeals for the Eighth Circuit has affirmed a ruling in favor of a defendant that was sued for violating the Fair Credit Reporting Act over information it furnished to the credit reporting agencies and then allegedly failing to conduct a reasonable investigation.
The background: The lawsuit stemmed from a dispute over a reported late mortgage payment. The plaintiffs filed for bankruptcy protection back in 2020 and, after reaffirming the loan, were told to make payments via the mail. They were instructed to include the mortgage loan number on the checks that were sent.
- In April 2020, the plaintiffs mailed a cashier’s check to the defendant for $0.88 than was owed and allegedly included a piece of paper in the envelope with the loan number on it.
- The defendant received the check, but did not deposit it, because it did not include any identifying information, did not match the amount that was due, and the defendant had 34 customers with the same name as the plaintiff.
- After the late payment appeared on the plaintiffs’ credit reports, disputes were submitted to the credit reporting agencies asserting that all payments had been made on time and requesting correction.
- Those disputes were forwarded to the defendant, which reviewed the account history, payment records, and internal notes before verifying the late payment as accurate.
- The plaintiff then filed suit, arguing both that the reporting itself was inaccurate and that the defendant failed to conduct a reasonable investigation as required under Section 1681s-2(b) of the FCRA.
The ruling: The Eighth Circuit affirmed the lower court’s summary judgment ruling for the defendant, concluding that the reported information was accurate and that the investigation was reasonable given the nature of the dispute. The court emphasized that a furnisher’s duty to investigate is tied to the information provided by the credit reporting agencies.
- Quoting prior precedent, the court explained that a furnisher “need investigate only what it learned about the nature of the dispute from the description in the [credit reporting agency]’s notice of dispute.” Here, the dispute letters were described as “conclusory and short,” stating only that the plaintiff had made all payments on time and providing no explanation of the alleged error.
- The court noted that the defendant reviewed account-level documentation and confirmed that the payment due on May 1 was not credited until more than 30 days later. Under those circumstances, the panel concluded that “its duties as a furnisher of information under the FCRA required no more,” and that no reasonable jury could find the investigation to be inadequate.
- The court also declined to adopt a heightened “materially misleading” standard for accuracy, finding it unnecessary because the investigation revealed no inaccuracy or incompleteness under any standard.
